Adding Pizzazz to Frozen Pizzas

June 1, 2012
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by Shane Whitaker

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Quick, convenient, cost-efficient and tasty, frozen pizzas can be found almost everywhere from super­markets, club stores, drug stores and convenience stores to gas stations and even some hardware store chains. However, today frozen pizzas also come with healthier attributes as well as with more gourmet ingredients and toppings. Pizza producers are targeting women and other groups who are not the traditional heavy consumers in this category.

“This messaging to target women, who are not the heavier users of pizza, with these healthier options seems like a wise move,” said David Browne, senior analyst for the Chicago, IL-based research firm Mintel. “But it could have been a big flop.

“I think one of reasons they have been successful is because they are conveying that healthier indulgence and really honing in on females who have been absent in a lot of the messaging in the past few years,” he continued.

Overall, Mr. Brown noted, a premiumization in the frozen pizza category. But he added, “Frozen has a problem.” And that is, consumers perceive frozen meals and snacks, including pizzas, to be highly processed and not very healthy, he explained.

“I think there is a lot of opportunity in frozen pizza, especially when you look at brands that are establishing a better-for-you platform and maybe even targeting women,” Mr. Browne said. “I also follow the natural and organic sector, and we know that brands like Amy’s Kitchen have done well with organic offerings.”

In addition to its organic pizzas, Amy’s Kitchen, Inc., Petaluma, CA, launched several related products with other healthy lifestyle attributes. In May 2011, the company began offering a single-serve Gluten-Free Margherita pizza made with a rice crust, and in December, it introduced Vegan Margherita Pizza with Daiya (dairy-free) Cheeze.

With $43.3 million in annual sales, according to the SymphonyIRI Group, Amy’s represents the 15th best-selling frozen pizza brand in retail stores tracked by the market research firm. Amy’s pizza holds a 1.4% share of the market, which may not sound like a lot, but this is a sector dominated by two major companies: Nestlé Pizza, Northbrook, IL, and Schwan’s Consumer Brands, Inc., Bloomington, MN.

It’s not delivery…

Occupying 11 of the Top 20 rankings, Nestlé’s and Schwan’s best-selling frozen pizza brands account for a nearly 68% dollar share of the $3.1 billion frozen retail pizza market. Nestlé’s market share grew tremendously after the Glendale, CA-based company acquired the North American frozen pizza business of Kraft Foods, Inc., Northfield, IL, in early 2010. This transaction included brands such as DiGiorno, Tombstone, California Pizza Kitchen and Jack’s. “At the time, Nestlé had about 5% market share, and now, it has more than 40%,” Mr. Browne said.

Since adding Kraft’s frozen pizza business, he pointed out, Nestlé has done a good job of co-branding products such as its Nestlé Tollhouse cookie dough with the top-selling DiGiorno brand. “However, I get the sense that [Nestlé] doesn’t want to rock the boat too much, especially with these huge brands that make up so much market share, and I don’t blame them,” Mr. Browne observed.

Following a 6% increase in dollar sales this past year, DiGiorno’s market share rose to 23.3%, a 1.4% increase compared with the previous year. That’s significant movement in a category as well established as frozen pizza. Overall, frozen pizza dollar sales at mainstream retailers dipped 0.4% for the 52-week period ending March 18, according to SymphonyIRI, and this comes on the heels of sales declines the past two years. In the executive summary of Mintel’s “Pizza at Retail” report released this past year, the company noted a 0.9% sales decline in 2010 but had predicted a sales turnaround in 2011, which didn’t materialize as frozen pizza sales dropped another 3% last year.

However, Mintel detailed strong frozen pizza sales growth in the years leading up to its report, noting that frozen pizza sales rose 22% between 2005 and 2009. Frozen pizza represents nearly 90% of the retail pizza market, which also includes refrigerated/frozen kits, crusts and dough as well as shelf-stable kits, pizza sauce and crusts sectors, according to Mintel.

To market their frozen pizzas, companies continue to compare price and value of frozen pizza to pizzas delivered directly to consumers from restaurants, according to Mr. Browne. Also, DiGiorno introduced its “Pizza and (side dish)” product, which mimics what pizza-delivery chains now do by including a side dish or dessert with orders.

However, unlike in the past when pizza producers targeted families, kids and young men, they’re now clearly marketing to women, healthier adults and couples. “I think that is a pretty bold move because when you look at the pizza market, it’s really not about health, and I don’t think anyone ever thinks of it that way,” Mr. Browne said.

Celebrating great taste

One such brand, according to Mr. Browne, is Schwan’s Freschetta Simply … Inspired thin crust pizza, which was introduced in spring 2011.

Available in eight varieties, Simply … Inspired, which uses the tagline “A celebration of great taste,” sold more than $41.4 million during its first year, and the Simply … Inspired Farmers Market Veggie pizza was named the best new supermarket food of 2011 by nationally syndicated food columnists. “Freschetta Simply … Inspired brings frozen pizza up to upscale restaurant quality,” said Carolyn Wyman, who writes the “Supermarket Sampler” column along with registered dietitian Bonnie Tandy Leblang. Ms. Leblang praised the pizza’s “plethora of veggies” and environmentally friendly packaging.

The company literally thought outside the box when developing packaging for the brand. Simply … Inspired’s Taste-Seal flexible packaging, which uses 30% less material than traditional frozen pizza packaging, earned a Silver Award for Packaging Excellence from the Flexible Packaging Association. In recognizing the packaging, the association stated, “This package incorporates a squared base that adds stability for on-end, in-case display, a curving top that creates a new iconic look, and eye-catching graphics.”

In addition to its more sustainable packaging, the crispy crust pizzas feature large vegetable slices, signature sauces and a variety of real cheeses, according to the company.

In October, Naked Pizza began showing up in the freezer aisle. Based on the fast-growing take-out and delivery chain with the same name, Naked Pizza from Frozen NP, LLC, Denver, CO, “is on a mission to promote healthier, more responsible eating by transforming a favorite food so that it both tastes great and is a good nutritional choice,” according to its website.

The company’s biggest challenge is making frozen pizza that tastes good yet is also still good for you, according to Anne Zilvitis, Frozen NP’s vice-president, marketing.

“Who doesn’t want a guilt-free pizza?” she asked. “I love that I can eat our pizza and not feel horrible about it inside or out. Naked Pizza fits the active lifestyle and encourages people to make good choices and have fun doing it.”

Frozen Naked Pizza currently is available in four varieties: Uncured Pepperoni, Chicken, Cheese and Superbiotic.

“We are also the only pizza with probiotics,” Ms. Zilvitis noted. “Naked Pizza offers a favorite food with a mission to improve our gut health and be a better nutrition choice. Our nutritionals stand out on their own.”

As an example, she cited the company’s best-selling Superbiotic pizza. Made with artichokes, roasted red bell peppers, sweet red onions, spinach, mushrooms, roasted garlic and cilantro, it provides 15 g whole grains, 18 g protein and 9 g fiber with 350 Cal per serving. “We also pride ourselves on our serving size, which is half the pizza, unlike most others that do a third or a quarter of the pizza,” she said. “We all know that is unrealistically low for a serving size.”

Although Naked Pizza offers a gluten-free crust at its takeout pizza stores, there are no plans to market it through supermarket freezers at this time. “There is a demand, but there are great brands already supplying that demand,” Ms. Zilvitis said. “We are really trying to stay focused on our diverse whole grain offering and digestive health mission.”

One company that recently launched gluten-free frozen pizzas is Udi’s Gluten Free Foods, Denver, CO. In March, it introduced three varieties: Pepperoni, Margherita and Three Cheese.

“We are thrilled to introduce our expanding gluten-free product line,” said Denise Sirovatka, the company’s vice-president of marketing. “Our goal is to create delicious, wholesome foods for all meals so gluten-free customers have the same eating and shopping experience as others.”

Although frozen pizzas will continue to be a staple for college students and young adults, especially men, new and more upscale offerings will most likely attract new consumers to this category. Frozen pizza has always been convenient and economical, but now, there are companies focused on making it a premium and better-for-you meal option.

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